Australian watchdog takes on Google and Facebook

Facebook and Google have said that they will consider the Australian Competition and Consumer Commission's report and engage with the commission ahead of its final report next year. However, both firms are expected to staunchly resist the push for to
Facebook and Google have said that they will consider the Australian Competition and Consumer Commission's report and engage with the commission ahead of its final report next year. However, both firms are expected to staunchly resist the push for tougher scrutiny of their algorithms.PHOTO: AGENCE FRANCE-PRESSE

Tech giants may be forced to reveal algorithms that determine search results and news feeds

Australia has become the latest country to take on the might of the technology giants, flagging proposals that could force Google and Facebook to reveal their mystical "algorithms" for determining search results and news feeds.

Following a year-long inquiry ordered by the federal government, Australia's corporate watchdog expressed concern about the market power of the two firms and the impact this was having on news outlets and the broader economy. It said the firms are often the window into the world and the online marketplace, but their method of determining the order in which content appears on their websites was "opaque".

The concerns were expressed in a wide-ranging report by the Australian Competition and Consumer Commission, which released its preliminary findings earlier this month. In a 374-page report, the commission called for the creation of a new regulator which would scrutinise the algorithms used by Google and Facebook. The commission said the firms could provide information about algorithms to the regulator but it would not be made publicly available.

"(This) would provide assurances to both businesses and consumers that algorithms are not being used to favour certain businesses or, in the case of news stories, are operating in such a way as to cause significant detriment to the production of news and journalistic content or media markets," the report said.

Facebook and Google said they will consider the report and engage with the commission ahead of its final report next year. However, both firms are expected to staunchly resist the push for tougher scrutiny of their algorithms.

A senior executive at Facebook, Mr Andy O'Connell, attacked the "unprecedented" proposal, saying it appeared to be a world first and risked undermining the attempt to ensure content feeds were based on the user's choices. He said the attempt to police algorithms would be "unworkable".

Facebook announced changes to its news feed earlier this year after it came under attack following revelations about Russian operatives disseminating false reports on the site during the presidential campaign in the United States in 2016. The changes included prioritising posts from news outlets deemed trustworthy and increasing the proportion of public posts from family and friends compared with those from advertisers and media outlets.

BEHIND THE ALGORITHMS

(This) would provide assurances to both businesses and consumers that algorithms are not being used to favour certain businesses or, in the case of news stories, are operating in such a way as to cause significant detriment to the production of news and journalistic content or media markets.

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Earlier this year, Google was hit by a €4.34 billion (S$6.8 billion) fine by European Union regulators over concerns that the firm's Android mobile operating system was used to block rivals. Google is challenging the fine.

The inquiry in Australia followed concerns about the market share of the two firms and their impact on the news media. It found that 94 per cent of searches in Australia were conducted on Google.

Of the almost A$8 billion (S$7.7 billion) spent on online advertising last year, Google received 38 per cent and Facebook 17 per cent. Meanwhile, traditional media outlets have struggled to compete for online advertising revenue as their print advertising revenue declined. The commission said this is posing a threat to media outlets and leading to "a reduction in certain forms of journalism which are beneficial to society".

In its report, the commission made various recommendations to promote competition, including requiring that mobile devices, computers and tablets provide consumers with options for Internet browsers and search engines rather than being installed with defaults such as Google's Chrome.

It also proposed that an ombudsman be established to deal with public and commercial complaints about digital platforms such as Google and Facebook.

 
 

Responding to the report, Australian Prime Minister Scott Morrison said he and other leaders around the world needed to "stand up" to large technology firms.

"There are responsibilities and accountabilities and, where I don't think they're being honoured, then I will act," he told Sydney's Daily Telegraph earlier this month.

The commission signalled that it wants to push for a coordinated international approach to regulating the technology giants. It plans to discuss its proposals with regulators around the world as well as bodies such as the Organisation for Economic Cooperation and Development. The commission will seek feedback on its proposals from the technology firms and the media sector. It is due to complete a final report by June next year.

A version of this article appeared in the print edition of The Sunday Times on December 23, 2018, with the headline 'Australian watchdog takes on Google and Facebook'. Print Edition | Subscribe